Answer the following statements true (T) or false (F)
1. If the auditor traces a sample of receiving reports to the perpetual inventory records, the
auditor is testing the control of validity.
2. Risk assessments and the results of any control testing are taken into account in selecting
the nature, timing, and extent of further substantive procedures.
3. When auditors trace the test counts they took at the physical inventory count to the final
inventory summary, they are gathering evidence on the completeness assertion.
4. Auditors must place more emphasis on the existence and rights assertions when
obtaining evidence about accounts payable.
5. An auditor should not be concerned if a cross-reference of vendor addresses with
employee addresses reveals that there are matches.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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Net income plus interest expense divided by average total assets is the formula for which of these analytical measures?
a. price-earnings ratio b. inventory turnover c. rate earned on total assets d. number of days' sales in inventory
Which of the following is a difference between the formal communication network and informal communication network??
A) ?The formal communication network is dictated by the cultural environment of an organization, whereas the informal communication network is dictated by the technical environment of an organization. B) ?The formal communication network has no single, consistent source, whereas the informal communication network has a single, consistent source. C) ?The formal communication network has a reputation for being speedy but inaccurate, whereas the informal communication network is always accurate. D) ?The formal communication network can be depicted graphically by the organization chart, whereas the informal communication network cannot be depicted accurately by any graphic means.
Customer lifetime value is used to segment customers based upon their?
a. Current profitability only b. Future profitability only c. Both current and future profitability d. Neither current nor future profitability
Quality management systems and standards ______.
a. are standards made global through the International Organization for Standards b. have the same technology or infrastructure requirements in different countries c. can be readily applied, without modification, across different countries d. can be challenging to transplant from one country to another because different cultures place different emphasis on quality